John C. Goodman

Nationwide, the cuts in subsidies will be large. As Sabrina Tavernise reports in The New York Times:

The cuts in subsidies for safety-net hospitals like Memorial — those that deliver a significant amount of care to poor, uninsured or otherwise vulnerable patients — are set to total at least $18 billion through 2020. The government has projected that as much as $22 billion more in Medicare subsidies could be cut by 2019, depending partly on the change in the numbers of uninsured nationally.

This is bad news for safety net hospitals. Grady Health, for example is facing a loss of about $100 billion in annual subsidies. As Tavernise explains:

"A full third of Grady's patients have no insurance, and, if that does not change, the hospital will have no choice but to cut services," said John M. Haupert, Grady's chief executive. "The hospital's large outpatient mental health program, which handles 58,000 visits a year and is critical to keeping poor patients with behavioral problems from seeking treatment in the emergency room, would most likely be hit," Mr. Haupert said.

Memorial Health in Savannah is also facing steep reductions in the subsidies:

Cancer care may be among the services reduced, administrators here said. Memorial is now one of only a few hospitals in the state with a tumor clinic that accepts poor patients without insurance. Many show up coughing blood or having trouble breathing because their cancers have gone untreated for so long.

Almost every proposed solution to this problem involves stopgap, patchwork reforms. Fortunately there is a better way.

For almost two decades now, my colleagues and I at the National Center for Policy Analysis have been proposing an approach that would provide universal coverage and a solution to the safety net problem in one fell swoop. The idea: offer every American a tax credit for health insurance ? in and out of the exchange, at work or away from work. If people turn down the offer and choose to be uninsured, the unclaimed credit would go to safety net institutions in the communities where they live.

When uninsured patients enter hospitals, they would be expected to pay their bills. But if they cannot, unclaimed credit funds would be available to pay for the care.

Under this approach, money follows people. The government would guarantee a certain amount of money for every person. If people choose private insurance, the subsidy would help pay premiums. If people elect to be uninsured, the money would go to the safety net.

Real universal coverage is simple and uncomplicated. It's the halfway measures that are incredibly complex and that leave victims in their wake.

John C. Goodman

John C. Goodman is President of the Goodman Institute and Senior Fellow at The Independent Institute. His books include the widely acclaimed A Better Choice: Healthcare Solutions for America and the award-winning Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts.”